For J. Morton Davis, the CEO of D.H. Blair Investment Banking, Wall Street’s most durable underwriter of the high-risk issuances known as “penny stocks,” there is indeed a second act in life, especially since he’s bankrolling it. Mr. Davis is providing most of the seed money for the $50 million D. H. Blair Film Capital Fund LLC, a venture designed to take advantage of a recently enacted tax provision to produce and distribute independent movies filmed in America.

The film business will be run by independent film industry veterans Michael Almog and Matthew Milich and will focus on acquiring and developing scripts that can be made into films without the backing – and costs – of major studios. In an interview, Mr. Milich said that the fund has already entered post production on its first film, “Tamara,” a horror film that the fund is jointly distributing with Lions Gate Entertainment. The film, as described by Mr. Milich, appears to be similar in scope to Stephen King’s 1975 classic “Carrie,” in which a picked-on teenage outcast burns down her high school, except this time, “Tamara” has to first come back from the dead to get revenge.

Another horror film that the fund has committed to is Clive Barker’s “The Plague.” Mr. Barker is best known for his numerous, and profitable, “Hellraiser” movies, where a demon called “Pinhead” frequently returns to earth to happily slaughter a variety of characters.

Mr. Milich said despite committing to two horror movies, the fund won’t focus exclusively on horror, and has committed to a drama and a comedy. Though they likely won’t be the next Harvey and Bob Weinstein of Miramax Studios fame, both Messrs. Milich and Almog do have experience with both classic higher-end independent films and mainstream films. Mr. Almog, who also is a partner in City Lights Media, a movie and television production and post production facility, was a producer in John Waters’s most recent film, “A Dirty Shame.” Mr. Milich worked at the company that produced the “The Wedding Planner” and “Nurse Betty.”

The fund will have the ability to compete for indie films that have major stars or directors attached, said Mr. Milich, since they will often work with a larger film production partner to sell distribution rights. In turn, they can take the cash from distribution rights and use it as collateral to obtain a bank loan to complete the film’s funding requirements. “As long as a movie makes economic sense, we can compete for most any script or star-driven independent movie,” said Mr. Almog.

The man staking the majority of the $50 million, Mr. Davis – he’s widely known as “Mortie” – is new to the film game, but knows something about making a buck. The longtime head of D.H. Blair, Mr. Davis and his investment bankers and brokers grew very rich in the 1990s selling the initial public offerings of dozens of companies now bankrupt or trading for pennies. Mr. Davis, who was unavailable to comment, has been the target of securities regulators for years.

In 1992, Mr. Davis sold the retail brokerage and securities trading component of D.H. Blair to his two sons-in-law, Alan Stahler and Kalman Renov, but maintained the chairmanship of the stock-underwriting aspect of the firm, which he renamed D.H. Blair Investment Banking. In 1998, after settling charges of stock manipulation for $4.4 million, D.H. Blair, the retail brokerage, shut its doors. In 2000, the firm was indicted by the New York State Attorney General’s office, with 15 of its officers, including Mr. Davis’s sons-in-law, named in the suit.